The capacity auction that moved PECO's supply charge

I.How the auction sets a price

If you pay a PECO bill in a Fishtown rowhouse or a twin in Upper Darby, the line that climbed fastest this year is not the one you usually watch. The delivery charges are familiar. The supply charge, the part labeled generation or the Price to Compare, is where a decision made three years ago in a conference room near Valley Forge shows up on your meter.

Part of that supply charge pays for capacity, which is the grid's promise that enough power plants will be standing by on the hottest afternoon in July or the coldest morning in January. PJM, the regional grid operator that runs the high-voltage system across Pennsylvania and twelve other states, buys that promise years ahead through an auction. PJM calls it the Base Residual Auction, usually held about three years before the delivery year it covers, and it clears at a single price for each region, quoted in dollars per megawatt-day, the daily rate for holding one megawatt of power on call.

II.The numbers, hedged and checkable

This desk cannot tell you the exact dollars this adds to your specific statement, because PECO's default-service price bundles energy and capacity together and resets on its own schedule. What we can do is trace the chain with every figure checkable against PJM's posted auction results and Pennsylvania Public Utility Commission filings.

For the 2024/2025 delivery year, the price across most of PJM landed at roughly $28.92 per megawatt-day, per PJM's posted results. The auction for 2025/2026, held in the summer of 2024, cleared at about $269.92, and the next one, for 2026/2027, came in near $329.17 and bumped against a cap. That is close to a tenfold jump in two auctions, and the exact figures sit on PJM's capacity market pages for anyone to read.

III.From Valley Forge to your meter

That wholesale price does not hit your bill directly. PECO, like other Pennsylvania utilities, buys power for customers who have not chosen a competitive supplier through a series of procurements approved by the state Public Utility Commission. Capacity is one cost inside those purchases, blended with energy and other charges into the generation rate you see as the Price to Compare.

Because of that blending, you will not find a clean capacity-went-up line on a residential statement. The honest way to read it is directional: when PJM capacity costs rise sharply, the supply portion of default service tends to rise at the next reset, and PECO files those changes with the commission where anyone can read them. If you want the real number for your home, compare your current Price to Compare against the prior period on your own bills rather than multiplying the auction figure yourself.

IV.Why the number jumped, and who pushed back

Several forces pulled the price up at once. Older coal and gas plants have retired faster than new ones connect, PJM tightened its rules after generators failed to perform during Winter Storm Elliott in December 2022, and demand is climbing as data centers and electrification add load. Fewer megawatts promising to show up, against more demand, means a higher clearing price.

Pennsylvania did not take the jump quietly. The Shapiro administration challenged PJM's results at the Federal Energy Regulatory Commission, and the parties reached a settlement that set a temporary ceiling and floor on the next two auctions, roughly a $325 cap and a $175 floor per megawatt-day at last public report. That is why the 2026/2027 figure sits near the cap rather than higher. Whether prices ease after that depends on how fast new supply clears PJM's interconnection queue, which is a slow and uncertain process.

V.Worth watching this month

1. PJM is expected to post results for its next Base Residual Auction on its capacity market pages, and the date has slipped before, so check the schedule rather than assume it.

2. PECO's next default-service procurement and any resulting Price to Compare change will be filed with the Pennsylvania Public Utility Commission, where the docket is public.

3. The FERC-approved price cap and floor apply to a limited set of auctions, so watch for any filing on what replaces them afterward.

4. Pennsylvania's Office of Consumer Advocate often comments on PECO rate changes, and its filings are a plain-language read on what a change means for residents.

5. Summer heat drives the demand that capacity is meant to cover, so a hot forecast for the Delaware Valley is a routine thing to note, not an alarm.

Sources on the bench

PJM, Reliability Pricing Model and capacity auction results (grid operator) The posted clearing prices in dollars per megawatt-day for each delivery year, straight from the operator that runs the auction. · www.pjm.com/markets-and-operations/rpm
Pennsylvania Public Utility Commission (state agency) Where PECO's default-service procurement plans and rate filings are docketed and open to public review. · www.puc.pa.gov
PECO rates and Price to Compare (utility) The utility's own explanation of the generation supply charge and how the Price to Compare is set and updated. · www.peco.com
Federal Energy Regulatory Commission (federal agency) The federal regulator that reviewed PJM's capacity results and approved the temporary price cap and floor settlement. · www.ferc.gov
Pennsylvania Office of Consumer Advocate (state agency) An independent state office that comments on PECO rate changes in plain language from the ratepayer's side. · www.oca.pa.gov